The Annual Rate of Return Is Computed by Dividing Expected

question 143

Multiple Choice

The annual rate of return is computed by dividing expected annual

• A) cash inflows by average investment.
• B) net income by average investment.
• C) cash inflows by original investment.
• D) net income by original investment.

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Definitions:

Average Total Cost

Average Total Cost is an economic concept that represents the total cost of production divided by the quantity of output produced, encompassing both fixed and variable costs.

Output

The total amount of goods or services produced by a firm, industry, or economy in a given period.

Average Fixed Cost

Fixed production costs (expenses unaffected by output levels) divided over the produced output quantity.

Total Revenue

The overall amount of money generated by a business from its sales activities before any costs or expenses are subtracted.